NUESSE V. CAMP | 385 F.2d 694 | D.C. Cir. | Judgment - Casemine

The denial of a motion to intervene as of right is appealable. Brotherhood of Railroad Trainmen v. Baltimore O.R.R., (1947); 4 J.MOORE, FEDERAL PRACTICE ¶ 24.15 (1966).

As amended effective July 1, 1966, Rule 24(a) of the Federal Rules of Civil Procedure permits intervention as of right —

when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

We think appellant made sufficient showing of each of the three necessary requirements: (i) an interest in the transaction, (ii) which the applicant may be impeded in protecting because of the action, (iii) that is not adequately represented by others.

An applicant for intervention must have an "interest" in the "transaction" which is the subject of the action. Contending that the Commissioner has no such interest as the Rule requires, the defendants rely on cases rejecting attempts by states and municipalities to intervene in lawsuits by virtue of their status as parens patriae in order to promote the general welfare of some of their citizens. Federal courts have frequently held that this type of concern does not rise to the stature of a definable legal right that constitutes a litigable "interest" in another's lawsuit, although the cases are by no means uniform. We need not wade into the general parens patriae fray, however, for we conclude that in this action the Commissioner has distinct legal rights of his own in his official station, rights more precise and definable than merely derivative interests arising because of his office as superintendent of the state's banking industry.

The standing of the state as parens patriae to intervene in a lawsuit of direct significance to the general welfare of the populace has been recognized. See, e.g., People of the State of California v. United States, , rehearing denied 181 F.2d 598 (9th Cir.), cert. denied 340 U.S. 826, 71 S.Ct. 61, 95 L.Ed. 607 (1950), where California was held entitled to intervene to protect its policy that water rights be used for the public weal. The court reasoned that if a state may fashion such a statutory policy, it may appear in court to defend it.

In Whitney Nat'l Bank v. Bank of New Orleans and Trust Co., (1963), rev'd on other grounds, (1965), we held that a state bank has standing to raise such a claim, and found it unnecessary to pass on the standing of a state banking commissioner who had intervened in the District Court. See . In a similar case, where Judge Wortendyke concluded that a state bank could seek similar relief directly against the national bank without joining the Comptroller as a defendant, the national bank did not contend that the state banking commissioner in a companion action against the same national bank lacked the requisite interest to sue, and this issue was not discussed. See Suburban Trust Co. v. National Bank of Westfield, (D.N.J. 1962).

As we said in Textile Workers Union v. Allendale Co., (1955) (en banc), cert. denied sub nom. Allendale Co. v. Mitchell, 351 U.S. 909, 76 S.Ct. 699, 100 L.Ed. 1444 (1956) in permitting intervention: "[o]bviously tailored to fit ordinary civil litigation, these provisions [of Rule 24] require other than literal application in atypical cases. Administrative cases, as the present one demonstrates often vary from the norm." We should not be niggardly in gauging the interest of a state administrative officer in the validity of what his federal counterpart has done in an area of overlapping fact and intertwined law. We not only have the greater impetus to intervention that inheres in administrative cases, but in addition the "interest" of the state commissioner is underlined by the circumstance that the regulation of national banking is an area in which Congress, in the exercise of delegated federal power, has for various policy reasons decided to adopt and incorporate state law on issues of common concern. This admixture of national and state policies, attaching national legal force to the state policy, yields the corollary that a state official directly concerned in effectuating the state policy has an "interest" in a legal controversy involving the Comptroller which concerns the nature and protection of the state policy.

In refusing the application for intervention, the District Court accepted the arguments of the Comptroller and the intervening national bank that the only issue involved in the pending action is the construction of the definitional section of the National Bank Act. If section 36(h) is so construed that a branchable Wisconsin savings and loan association is an "institution" "carrying on the banking business," the Comptroller would apparently prevail on the merits. To agree that the ultimate question is the meaning of a federal statute, however, does not mean that the state banking commissioner has no "interest" in how that question is answered. For on this interpretation rests a large part of the advancement of the Congressional policy of competitive equality between state and national banks. Where Congress has been most deliberate in promoting a policy of equal opportunity by adopting state law on the subject, we think the courts may not be insensitive to the request by the official charged with administering the state's banking laws to appear as a party to urge the construction of the federal statute that he claims is necessary to secure the state's interests, and hence the congressional objectives.

The Supreme Court's most recent expression of intervention policy appears in Cascade Natural Gas Corp. v. El Paso National Gas Co., (1967), reversing United States v. El Paso National Gas Co., 37 F.R.D. 330 (D.Utah 1965). The Court ruled that the State of California was entitled to intervene as of right in proceedings on remand when "protection of California interests in a competitive system was at the heart of our mandate directing divestiture." We hold that where protection of the competitive equality of state banks is the core of the federal statute controlling the branching of national banks, a state banking commissioner has an adequate interest in the construction of the federal act to justify intervention.

Prior to the 1966 amendment of Rule 24, the Commissioner would probably not have been entitled to intervene in this action, for the pre-amendment Rule required that the applicant might be "bound" by the judgment in the pending action and the prevailing weight of authority interpreted this test to mean bound in the res judicata sense. See, e.g., Sam Fox Publishing Co. v. United States, (1961). The changes wrought in Rule 24(a) have repudiated that narrow approach in general, and Sam Fox in particular. The Rule now specifies only that the "disposition of the action may as a practical matter impair or impede his ability to protect" the applicant's interest. This alteration is obviously designed to liberalize the right to intervene in federal actions. Interestingly, an earlier draft would have required that the judgment "substantially" impair or impede the interest, but that higher barrier was deleted in the course of approving the amendment. See Cohn, The New Federal Rules of Civil Procedure, 54 GEO.L.J. 1204, 1232 (1966).

We think that under this new test stare decisions principles may in some cases supply the practical disadvantage that warrants intervention as of right. We join, therefore, in the analysis recently presented by Judge Brown in Atlantis Development Corp. v. United States, .

We need not and do not consider how far this doctrine rightly extends. In the case at bar, a question of first impression is being presented that will involve a decision whether terms in the National Bank Act mean that the Comptroller of the Currency may authorize a national bank (not a federal savings and loan association) to branch where the laws of the State of Wisconsin would not permit a state bank to branch (although they would permit a state savings and loan to do so). The Commissioner would not be precluded by res judicata from relitigating this question if an unfavorable answer is rendered in his absence. But even under the former rule, the opportunity to raise the same issue in another forum was no bar to intervention as of right, and we may expect that a decision by the District Court here, the first judicial treatment of this question, would receive great weight, whether the question arose again in this jurisdiction or in the federal court in Wisconsin. Should this court on appeal render a decision in the Commissioner's absence, and contrary to his view, he would presumably be hampered in seeking to vindicate his approach in another court. He might retain the hope of sparking a conflict between circuits, and possibly even Supreme Court resolution. At least in part, it is this fragmented approach to adjudication that the revitalized federal rules seek to avoid. In fairness to their spirit, we think we must recognize the practical consequences of the "failure to allow [the Commissioner] an opportunity to advance [his] own theories both of law and fact in the trial (and appeal) of the pending case." Atlantis Development Corp. v. United States, . And in this context it is significant that the District Court denied a motion for summary judgment on the merits of this case, on the ground that even though the issue is one of statutory construction, and thus one of "law", the nature of the dispute is such that evidence might be helpful in arriving at an interpretation.